MANISH GUPTA
Ranchi, Nov 9: Jharkhand’s dependence on central funding has risen by 7.5 percentage points in its 22 years of journey since its formation on 15 November 2000. From 36.4% in 2001-02, the share of devolution and grants jumped to 43.9% in 2022-23.
The state’s share of central taxes or devolution in financial year 2001-02 was budgeted at Rs 1,895 crore and the grants-in-aid from Government of India was Rs 687 crore. Together, the central funds accounted for 36.4% in the first full year of Jharkhand.
For fiscal 2022-23, the budget estimate for devolution is Rs 27,007 crore and the grants is Rs 17,406 crore, accounting for 43.9% of the total budget. State’s budget has swollen to Rs 1,01,101 crore in 2022-23, 14 times more than Rs 7,101 crore in 2001-02.
Meanwhile, the state’s own capacity to collect taxes and non-tax revenues has declined from 43.8% in 2001-02 to 38.2% in 2022-23. Only small taxes such as excise, transport and electricity duty, along with tax on fuel, are still with the state governments.
Jharkhand’s own tax revenue was budgeted at Rs 2,036 crore and non-tax revenue at Rs 1,078 crore in 2001-02, and it accounted for 43.8% of that year’s budget. This figure has come down to 38.2% in 2022-23. The budget estimate for state’s own taxes is Rs 24,850 crore and own non-tax revenue is Rs 13,763 crore for fiscal year 2022-23.
Economists believe that the increasing dependence on central funds is detrimental for the state’s functioning and the country’s federal structure. States that have the same party in power as in the centre tend to benefit more. Call it the double engine benefit.
